More questions on 1MDB’s investments

(The Star) – The Finance Ministry (MoF) today raised more questions on investments worth US$8.33bil (RM33.15bil) made by 1Malaysia Development Bhd (1MDB) between 2009 and 2013 and asked former prime minister Datuk Seri Najib Tun Razak to account for several transactions.

Finance Minister Lim Guan Eng said rather than debating whether 1MDB’s RM6.98bil payments were a bailout by the MoF, it would be “more productive” if Najib answered the new query.

In his statement today, he posed three questions:

1) Where has the US$1.83bil (RM7.28bil) invested with PetroSaudi International Ltd between 2009 and 2011 gone to?

2) Where has the US$3.5bil (RM13.93bil) raised in 2012 for the purpose of acquiring power plants in Malaysia gone to?

3) Where has the US$3bil (RM11.94bil) raised in 2013 for the purpose of investing in the Tun Razak Exchange (TRX) gone to?

On the RM6.98bil paid by the MoF on behalf of 1MDB, Lim said the payments were made in relation to borrowings that were completely unrelated to the latter’s real estate projects, including TRX and Bandar Malaysia.

The payments were instead made to service coupon interests for three bond issuances – US$3.5bil worth of 10-year bonds issued in May and October 2012, RM5bil 30-year bond issued in 2009 and US$3bil 10-year bond issued in March 2013 – and repay fully the US$1.2bil (RM4.77bil) advance from Abu Dhabi’s International Petroleum Investment Corp (IPIC).

The US$3.5bil bond was intended for acquiring power plant assets.

However, although the assets have been disposed of and the proceeds have been fully utilised, the bonds remain outstanding.

The RM5bil bond was mainly used for 1MDB’s failed investment with PetroSaudi International.

As for the US$3bil bond, it was intended to fund the development of TRX but the Auditor-General reported the funds raised were not used for that purpose.

Lastly, the advance from IPIC was taken in April 2015 to repay US$975mil (RM3.88bil) of borrowings from a Deutsche Bank-led consortium.

Lim, therefore, questioned why any returns from the real estate projects, the land for which was originally acquired cheap from the government, be used to “cover up the financial holes created by all of 1MDB’s other financial misadventures and shenanigans?”

“Hence, given all of the above facts and figures, there could be no other description for the RM6.98bil worth of payments by the MoF on behalf of 1MDB to date, other than to describe it as the single largest bailout in history carried out by the government of Malaysia,” he said.

Lim was responding to Najib’s denial that the payments of RM6.98bil were a bailout of 1MDB.

The former prime minister pointed out that the 1MDB had transferred all its real estate assets to the MoF, saying these should be construed as “compensation”.

In concluding his statement, Lim said the MoF would work hand in glove with the 1MDB Special Committee set up by Prime Minister Tun Dr Mahathir Mohamad to “uncover the complete truth behind 1MDB in order to recover as much of the lost and stolen funds as possible to plug the debts and deficits created by the Najib administration”.

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